Revenge of the Unread – Part 2

Over a year has passed since we warned of the risk of signing unread documents in Revenge of the Unread.

It’s no surprise, but many signers are still not reading documents before agreeing to the contents. If anything, operating in today’s more virtual world leads to even more opportunities to “click to agree.”  Agreeing without review is so commonplace now that people don’t even think about their signature (or their “click”) as agreeing, and many don’t even remember doing it. 

But the risk of unread agreements is alive and well and no doubt incubating. Retired commercial litigator, Larry Rouse, puts it even more strongly: “I earned my living based on revenge of the unread.”

As a commercial litigator, many of Larry’s cases involved a conflict born out of an agreement that one of the parties did not live up to.   Larry explains that in his experience, a majority of those situations involved an agreement that was not fully understood before it was signed, and in many cases, not even read.

Larry describes a situation he encountered in the last few weeks. As a seller in a real estate transaction, he was asked to sign a “standard” addendum related to the COVID situation.   Given his background in commercial litigation, he took the time to read the full document.   Probably few others ever had.  Tucked away in the “standard” document was a provision that gave the buyer an option to extend the closing date by at least 90 days, PLUS the right to opt out of the transaction after that time without penalty.  Quite a significant surprise – the seller takes the property off the market for 90 days and the buyer has a free option!  Of course Larry objected to the burdensome provision and the term was changed.  Interestingly, even his broker was unaware of the “standard” document’s drastic contents or implications.

It is unrealistic to think that casual consumers are going to become more careful with every type of agreement. But in a significant transaction, with potentially costly consequences, the parties need to read and understand exactly what they are agreeing to before signing. A responsible party must insist on the opportunity to negotiate appropriate revisions before agreeing to terms to which he or she will be held accountable.  Yes, it takes a little more time, but it is time well spent if it prevents a future conflict.

Reading a contract can be tedious, and people often find reasons or excuses to not “need” to read it.  And if you read it, pushing back on unacceptable language and negotiating changes takes time and can seem confrontational and unpleasant. Technology has the potential to make the contract process easier, but most of this type of technology does not encourage careful review of a contract.   A “click to agree” document on a technology platform that takes the user from signature line to signature line, without giving them an opportunity to review the language they are signing, is antithetical to a thoughtful review process.

Transaction Commons can help.  It is a neutral platform for negotiating and completing virtual transactions.  Transaction Commons can keep your reference information easily accessible and your document versions organized.  With everything in one place and all of the transaction parties on the same page, the review and signing process can be streamlined, while preserving – and facilitating – a prudent approach to entering into an agreement.

Stay tuned for our planned podcast series discussing other examples of “revenge of the unread.”  If you have a good example – email it to us.  We will keep its source anonymous if you’d like!